Big corporations always deal with huge and demanding legal issues that are the subject of experienced lawyers. Still, having many lawyers for different fields of the legal department is often expensive and not management-effective. Therefore, the companies like to hire a general counsel who reports to CEO. So, in a nutshell, why do the companies hire the general counsel? What can they help that other lawyer cannot?
Imagine if a company has a lawyer who is specialized in real estate domestic law. A few months later, the company expands its work to overseas and it needs another lawyer who possesses extensive knowledge on the same subject but on the international level. This means that they need to hire another lawyer and so on. To prevent this and reduce the legal costs within the company, they would hire the general counsel who has much more experience and knowledge in this field. Plus, the GC always comes with the top-notch management skills, so it leaves space for forming the legal team further, as there is one who can manage and direct all other lawyers. After all, the general counsel works with the business team and knows the needs of a company in legal terms.
The GC is the top position in the legal department, but it is not only limited to the legal department. After some time, he can become the CEO and run the company if needed, as he knows every single thing about the company. Before he replaces the current SEO, he can also be a highly valuable counselor of the CEO and work with him to reach the best decisions. Additionally, if a company decided to replace the CEO, there is no need to look for someone outside and spend time explaining to him how things work. The logical replacement would be the head of the legal apartment, which is the general counsel.
Reduce the legal problems of a company
Any company finds itself in legal trouble, either by their own mistake or by someone else’s. In any case, the role of GC is to detect the possible legal problems and guide the company to avoid these if possible. Not only they know how the law works, but they also know the current state and progress within the company, which helps him in determining the efficient strategies to avoid possible legal problems. No one knows a company better than the CEO and a great general counsel